UK-based Wahanda (now Treatwell) and Estee Lauder lead in industry acquisitions.
Beauty brands, CPG companies, and private equity firms are snapping up beauty and cosmetics startups at record rates. We’ve already seen 39 beauty acquisitions in the first eight months of 2016, nearly as many as in all of 2015, when there were 41 acquisitions in the category. If M&A activity continues at its current rate, we may see 59 M&A deals throughout 2016, a 44% increase from last year.
This growth comes atop a significant jump in 2015, when deal count more than doubled to 41 from just 16 in 2014.
On the other hand, beauty IPOs remain uncommon. The sector saw just three IPOs over the past five years: cosmetics company Coty, which controls over 47 brands, in 2013; Chinese beauty e-commerce platform Jumei in 2014; and India’s cosmetic fragrance giant S H Kelkar & Company (operating as Keva) in 2015.
We have not seen any IPOs yet this year, although cosmetics brand e.l.f. Beauty filed for a $100M IPO on Aug. 26, 2016, and South Korea’s CLIO Cosmetics filed for an IPO in July.
Our beauty category includes brands producing and selling makeup, hair care, and skincare products, e-commerce platforms focused solely on beauty and cosmetics, and beauty services such as spas or on-demand hair styling apps. It does not include broad e-commerce platforms that happen to sell beauty products, or medical services.
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Annual exit trends
Beauty M&A deals dropped in 2013 but have grown every year since then, reaching almost as many deals in 2016 to date (9/1/16) as took place in all of 2015. The largest disclosed acquisition so far this year was the German Stroer Group’s $39M acquisition of M. Asam, an online makeup producer and retailer. (Note: The values of most M&A deals this year have not been disclosed.)
Most active acquirers
Estee Lauder and Wahanda have been the most active acquirers in the beauty space over the past five years. The London-based Wahanda, an online marketplace for hair and beauty services, was itself a startup, and was acquired in 2015 by Tokyo-based Recruit Holdings. The company currently operates as Treatwell, a name taken from an Amsterdam-based beauty marketplace it acquired in 2015. Since 2012, it has acquired numerous online beauty-booking platforms across Europe, including France’s ZenSoon, Austria’s BeautyCheck, Lithuania’s Lemon Labs, and Germany’s SalonMeister.
Estee Lauder, on the other hand, has mainly acquired fragrance and cosmetic brands, including Korean skincare brand Have & Be Co. and Parisian fragrance brand By Killian. Unilever, ranked third, has acquired several skincare brands.
| Rank | Company | Example Acquisition |
|---|---|---|
| 1 | Wahanda | BeautyCheck |
| 1 | The Estee Lauder Companies | Le Labo |
| 3 | Unilever | REN Skincare |
| 4 | Quikr | Salosa |
| 4 | PDC Brands | Original Additions |
| 4 | High Ridge Brands | Continental Fragrances |
| 4 | International Flavors & Fragrances | Lucas Meyer Cosmetics |
| 4 | CURiO | Thymes |
| 4 | Tengram Capital Partners | Terra Via – Algenist |
| 4 | Revlon | CBBeauty |
| 4 | Coty | Bourjois |
| 4 | ADA Cosmetics International | Pacific Direct |
| 4 | Johnson & Johnson | Vogue International |
| 4 | Voonik | Styl |
| 4 | Knowlton Development Corporation | Cosmetic Technologies |
| 4 | Markwins International | Lip Smacker |
| 4 | L’Oreal | IT Cosmetics |
Business social graph
To dive deeper into M&A activity and the relationship between active acquirers, we used our Business Social Graph tool to chart acquisitions since 2012. As the chart shows, the majority of players have made just one acquisition.
Please click to enlarge.
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